Is the Fed About to Switch Up Mortgage Interest Rates?Article Posted by Expert Author: Sam Stieler on 04/08/2013
If you’re looking to take on a new mortgage or if you’re considering either renegotiating the terms of your existing mortgage or refinancing the loan altogether, then you need to pay attention to the news in the coming weeks as the Feds may be making some big buys in response to recent news regarding the relative yields on big-name mortgage securities.
Bloomsberg Businessweek reports that the relative measures attached to Fannie Mae and Freddie Mac’s home loans dropped to lowest they’ve been in five years. This is distressing enough news on its own, but made worse by the fact these relative yields tend to be the guiding force for the rest of the mortgage market. In response the Fed is likely to buy up more bonds and continue with their promise to keep rates for borrowing as close to zero as possible, but until the Fed makes an official announcement it’s too soon to tell how they’ll respond to this troublesome news.
The good news in all of this is that interest rates for borrowing remain at historically the lowest prices ever. This will bode well for anyone who is able to purchase a home for the first time, or who is able to refinance their existing loan. Check out our home mortgage calculator to do the initial homework and determine how taking action might impact your budget.
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